By: E&P Staff
Reacting Thursday afternoon to the lawsuit its controlling stakeholder, Hollinger Inc., Chicago Sun-Times parent Hollinger International hinted it may seek to remove the two Inc. directors that sit on its board.
“From a corporate governance standpoint, Inc.’s latest litigation gambit demonstrates the obvious conflict of interest afflicting the two Inc. directors on the company’s board,” International CEO Gordon A. Paris said in a statement. “The company is studying its options to protect the interests of the public majority non-controlling stockholders.”
Last December, International acceded to Inc.’s demands that it have representatives on the board, arguing that it deserved the seats because it is International’s controlling stakeholder. Inc. — which deposed newspaper mogul Conrad Black once used to control his newspaper empire — owns a 17.4% equity stake in International but a 66.8% voting interest through its super-voting shares.
As reported Thursday morning, Toronto-based Inc. is seeking to counter-sue International in U.S. District Court in Chicago, alleging International fraudulently stripped it off assets, including The Daily Telegraph of London and its Canadian papers. All those properties have since been sold by International.
Inc. also announced it was seeking to file a lawsuit in the Ontario Superior Court of Justice in Canada, alleging fraud by Black and others, including his wife Barbara Amiel-Black; former Sun-Times Publisher David Radler; and former Hollinger executives John Boultbee and Peter Atkinson.
International said it will oppose the motion to permit Inc.?s counter-suit.
Paris said Inc.’s “claim that it allowed itself to be ‘defrauded’ in transactions with an entity that it majority-owned, dominated and controlled is both factually implausible and legally without merit.”
Inc., he added, was “grasping at straws to distract attention from the powerful evidence — including its own recent admission in its cooperation agreement with U.S. law enforcement authorities — of Inc.’s participation in the looting of” Hollinger International.